Excerpt: - - , read with section 10, evidence act, will come into play only when the court is satisfied that there is reasonable ground for belief that two or more persons have conspired together to commit an offence. the proviso to this section affords protection to answers which a witness objects to give or which he has been asked to be given and which thereafter he has failed to give......godowns on behalf of the state bank from october 17, 1959, to december 5, 1962, for keeping the goods pledged or for giving delivery against delivery letters in compliance with the instructions issued to them by the bank agents. it was their duty to see on behalf of the bank that the goods, in correct quantity, quality arid value, as detailed in the pledged letters, were pledged with the bank and were given delivery of to the firm and to maintain proper accounts in respect thereto.in december, 1962, the bank found that the stocks of the firm had accumulated and that the pledged goods were not taken delivery of by the firm. detailed inspections were, therefore undertaken by the bank authorities on december 4, and 5, 1962, in the presence of gurubachan singh and rameshchander ramdeo of.....

Judgment:ORDER

L.S. Mehta, J.

1. These are the four references submitted by learned Sessions Judge, Jaipur City, recommending that the order of the special Magistrate, Jaipur City, dated December 11, 1967, directing the prosecution of M, C. Taneja, M. R. Kirtane and S. C. Bhattacharji, be quashed.

2. The facts of the case, as alleged by the prosecution, are that on October 17, 1959, in pursuance of the scheme for financing Small Scale Industries and at the request of M/s. Gandhi Industries, Jaipur, a cash credit limit of Rs. 10,000, upon the security of the pledge of goods purchased and mercandise deposited on lock and key basis, was sanctioned by the State Bank of India and cash and credit account was allowed to be opened and operated. The limit of the advances upon this cash credit account was such as was not to exceed with interest thereon 60% of the market value of the goods purchased and the mercandise for the time being pledged. This cash credit limit was subsequently enhanced as per request of M/s. Gandhi Industries, Jaipur, to Rs. 25,000, on December 19, 1959. It was further increased to Rupees 1,00,000, on November 2, 1960. It was again increased upto Rs. 1,25,000, on February 23, 1961. Ultimately, it went upto Rs. 1,80,000, on February 5, 1962. During this period the persons who worked as Agents at the State Bank of Jaipur, and who raised the cash credit limit were:

1. M. E. Kirtane Between June 1959 and February, 1961.

2. S. C. Bhattacharjea Between April, 1961, and January, 1962.

3. M. C. Taneja Between February, 1962 and December, 1962.

Dharm Dev Aggarwal was posted as Godown-keeper from October 17, 1959, to November 4, 1961. Kamesh Chander Ramdeo took over charge from Dharam Deo Aggarwal on November 4, 1961, and he continued to work as Godown-keeper upto December 5, 1962, The godowns of Messers. Gandhi Industries, Jaipur, were located in the premises of the firm. They were first put incharge of the Godown-keeper Dharam Deo Aggarwal. Thereafter they were incharge of Rameshchander Ramdeo. They operated these godowns on behalf of the State Bank from October 17, 1959, to December 5, 1962, for keeping the goods pledged or for giving delivery against delivery letters in compliance with the instructions issued to them by the Bank Agents. It was their duty to see on behalf of the Bank that the goods, in correct quantity, quality arid value, as detailed in the pledged letters, were pledged with the Bank and were given delivery of to the firm and to maintain proper accounts in respect thereto.

In December, 1962, the Bank found that the stocks of the firm had accumulated and that the pledged goods were not taken delivery of by the firm. Detailed inspections were, therefore undertaken by the Bank authorities on December 4, and 5, 1962, in the presence of Gurubachan Singh and Rameshchander Ramdeo of the firm, Gandhi Industries Jaipur. A big shortage both in wool and yards of felt was discovered. It was further revealed that the goods stocked in the godown were of inferior quality. The Bank authorities then, with a view to conduct a thorough examination, asked the Deputy Director, Sheep and Wool, Rajasthan, Jaipur, to check-up the goods. Eventually, it was found that there was a shortage of 257 maunds and 39 seers of wool and 1607 yards of woollen felts. Besides, the wool was of very inferior quality. The total value of goods in godowns was estimated to be Rs. 46,138.12; whereas the value as per stock ledger was Rupees 2,89,185. The outstanding amount on cash credit due to the Bank from the firm was Rs. 1,75,196.66. The firm could draw 60 per cent of Rs. 46,136.12 i.e., Rs. 27,682; whereas in fact it had drawn Rs. 1,75,196.66 The Bank was thus cheated to the tune of Rs. 1,47,514.66P.

3. Eventually the Bank authorities lodged a report with the Special Police Establishment, New Delhi, in respect of the above incident. On receipt of the report the police undertook investigation. At the conclusion of the investigation a challan was put up against Gurubachan Singh, proprietor of the firm, Mohanjeet Singh, son of Gurubachan Singh, and two godown-keepers of the Bank, namely, Dharam Deo Aggarwal and Rameshchander Ramdeo to stand trial under Section 420, and Section 120B, read with Section 420, I.P.C., in the Court of Special Magistrate, Jaipur. The said Magistrate started committal proceedings in view of the large amount involved in the case.

4. On behalf of the prosecution 5 witnesses were examined, namely, M. R. Kiratane, P. W. 1; R. L. Mahendru, P. W. 2; T. D. Chawia, P. W. 3; M. G. Taneja, P. W. 4; and S. C. Bhattacharjee, P.W. 5. Learned Magistrate examined the above-named 4 accused persons in accordance with the provisions of Section 342, Cr. P. C. Thereafter he heard arguments advanced on behalf of both the parties on 11-12-67. He, instead of passing an order for the commitment of the accused to the Court of Sessions Judge or an order discharging the accused exercised his powers under Section 190(1)(c), Cr. P. C., and ordered that M. R. Kirtaue, S. C. Bhattacharjee and M. C. Taneja, who were the agents of the Bank during the relevant period, should be made co-accused in the case,

5. Dissatisfied with that order, all the three persons went up in revision to the Court of Sessions Judge, Jaipur City. The State also filed a revision application, praying that the Magistrate's order for prosecuting the three agents should be set aside. Learned Sessions Judge, Jaipur City, observed in his orders of references that the only material available, according to learned Magistrate, against the petitioners was two-fold, namely, (1) that the petitioners raised the limits of the amounts of the cash-credit without seeing the accounts of the firm and without any request made on behalf of the firm, and (2) that although it was the duty of the petitioners to verify the stocks physically by periodic inspections, they did not do so. According to learned Sessions Judge, there is absolutely no mention in the charge-sheet that the petitioner either cheated the Bank or were a party to the conspiracy. The said Judge also observed that it is true that it was the duty of the petitioners to make a periodic inspection of the goods pledged, but the non-performance of the duty or negligence on their part does not lead to the inference that the petitioners were privy to the offence of cheating. He, in the end, pointed out that the three petitioners were examined as prosecution witnesses in the case and, therefore, they were protected by the provisions of Section 132, Evidence Act. On these grounds he submits that the order of learned Magistrate, dated December 11, 1967, be set aside.

6. The case was argued by Shri H. L. Anand for M. C. Taneja, S. C. Bhattacharjee and M. R. Kirtanc. The State is represented by Shri B. C. Chatterjee. Both the learned Counsel supported the references,

7. The principal charge made against the three petitioners is of 120-B, I. P. C. There is no difference between the mode of proof of the offence of conspiracy and that of any other offence. Conspiracy can be established by direct evidence or by circumstantial evidence. Section 120A, I. P. C., gives the definition of criminal conspiracy. Section 120B prescribes punishment for the same. Section 120A, I. P. C., read with Section 10, Evidence Act, will come into play only when the Court is satisfied that there is reasonable ground for belief that two or more persons have conspired together to commit an offence. There should be prima facie evidence that a person was a party to a conspiracy before his act can be used against him or against his co-conspirator. The evidentiary value of the said Act is limited in main by two circumstances, namely, that the Act shall be in reference to their common intention and that it should be in respect of a period after the intention was entertained by any one of them. What is the material available on the record to infer that there was common intention and that the act was in respect of a period after such intention was entertained by any one of them? Learned Special Magistrate has depended upon two sets of material. Firstly, he has relied upon the fact that the petitioners were duty bound to check the stocks and from this circumstance their mala fide intention can be gathered. The other material to which he has resorted is that the three petitioners extended the limits of the advances and raised them from Rs. 10,000 to Rs. 1,80,000.

8. It might be the duty of the petitioner to have periodic checking of the godowns in charge of the Bank, but non-performance of a duty or the neglect of a duty does not lead to the inference that the petitioners were parties to conspiracy to commit an offence under Section 420, I. P. C, Admittedly the petitioners had only supervisory functions to perform. It was not practicable for them to make physical verification of the huge stock pledged by the firm with the Bank. The godowns were in charge of the godown-keepers, who were directly concerned with the deposits and the delivery of the goods. It will be preposterous to envisage that simply because the three petitioners did not check up the articles pledged with the Bank in time, they were party to the criminal conspiracy.

9. As for the second set of material, suffice it to say that the limit of advance is fixed by the Regional Head office, New Delhi. That apart, these limits do not indicate the drawing power of the party. Drawing power is determined upon the value of the goods pledged. For the determination of the value of the goods pledged, services of the godown-keepers have to be procured. The godown-keeper certified the quantity of the goods as also the value of the goods pledged and then advances could be made on the basis of their certificates. If the godown-keepers submitted false certificates which enabled the drawer to draw more money than the prescribed limit, the petitioners cannot be held liable for that.

10. It may also be stated inter alia that the three petitioners were produced as prosecution witnesses on behalf of the State. Section 132, Evidence Act, reads as follows:

A witness shall not be excused from answering any question as to any matter relevant to the matter in issue in any suit or in any civil or criminal proceeding, upon the ground that the answer to such question will criminate, or may tend directly or indirectly to criminate such witness, or that it will expose or tend directly or indirectly to expose, such witness to a penalty or forfeiture of any kind;

Provided that no such answer, which a witness shall be compelled to give, shall subject him to any arrest or prosecution, or be proved against him in any criminal proceeding except a prosecution for giving false evidence by such answer.

The proviso to this section affords protection to answers which a witness objects to give or which he has been asked to be given and which thereafter he has failed to give. Under this section a witness shall not be excused from answering any question as to any matter relevant to the matter in question in any criminal proceeding on the ground that his answer would incriminate or may tend directly or indirectly to expose him to a penalty or forfeiture of any kind. In other words, if these three petitioners were cited as witnesses, they were bound to answer all questions and they could not be prosecuted for their answers. In India the privilege of refusing to answer has been removed with a view that temptation to tell a lie may be avoided and, therefore, protection of the witness has been provided in Section 132, Evidence Act. The protection under Section 132, Evidence Act, gets further support from Article 20(3) of the Indian Constitution. In support of this proposition reliance is placed on Laxmipat Choraria v. State of Maharashtra 0065/1967 : 1968CriLJ1124 . Therefore, the testimony of these witnesses being that of competent witnesses is protected by proviso to Section 132, Evidence Act.

11. For the foregoing reasons, I agree with the comments made by learned Sessions Judge, Jaipur City, in his orders of reference. The references are accordingly accepted, and the order of learned Special Magistrate, Jaipur, dated December 11, 1967, is quashed. This disposes of Criminal References Nos. 203 of 1968; 204 of 1968; 205 of 1968; and 206 of 1968. The record may be sent back early.